Global engineering and construction deals insights: Year-end 2018

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Executive summary

M&A activity within the sector continued to lag prior years on an overall deal value and volume basis. Q4 2018 was a bright spot in the year with two significant transactions announced, driving average deal size to its second highest levels in 12 quarters. Continued geopolitical uncertainty, despite positive underlying sector fundamentals, are driving more muted M&A levels. Entering the new year, the fundamentals remain favorable at a sector level.  These, combined with strong corporate balance sheets, record levels of dry powder and stable debt markets, are supportive of continued M&A momentum.

Key trends/highlights

  • Deal value in 2018 was $94 billion, a significant decline of 21% over 2017. However, the deal value in Q4 with $26.2 billion increased by 12% vis-à-vis previous quarter buoyed by two material transactions announced in Q4.
  • Average deal size in 2018 was $113.1 million, a slight decrease versus FY 2017 of only 7% (compared to a decline in deal volume for deals with disclosed deal value of 14%) reflecting strong valuation levels and deal size. In Q4 2018, the average deal size was $134.4 million, second only to Q4 2017.
  • At the regional level, 55% of deal value was driven by Asia and Oceania acquirers.
  • Additionally, 67% of deal value was driven by strategic investors.

“M&A values picked up significantly in Q418 buoyed by two significant transactions. Despite decreases in overall year-over-year activity, the underlying sector fundamentals remain strong and further supported by favorable availability of capital.”

Colin McIntyre, US Engineering and Construction Deals Leader

Contact us

Colin McIntyre

Engineering and Construction Deals Leader, PwC US

Tel: +1 (646) 818 7013

Michael Sobolewski

Engineering and Construction Leader, PwC US

Tel: +1 (313) 394 3299

Jonathan Hook

Global Engineering and Construction Leader, PwC United Kingdom

Tel: +44 (0) 207-8044753

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